U.S. stocks continue to soar!

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Ferdinand2014
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Re: "S&P 500 Index closes at record high"

Post by Ferdinand2014 » Thu Apr 25, 2019 12:53 am

Deleted to add quote
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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Re: "S&P 500 Index closes at record high"

Post by Ferdinand2014 » Thu Apr 25, 2019 12:54 am

willthrill81 wrote:
Thu Apr 25, 2019 12:17 am
Dialectical Investor wrote:
Thu Apr 25, 2019 12:07 am
Ferdinand2014 wrote:
Wed Apr 24, 2019 11:29 pm
Dialectical Investor wrote:
Wed Apr 24, 2019 9:08 pm
CFM300 wrote:
Wed Apr 24, 2019 1:34 pm
Many people in this thread seem to be equating "stay the course" with "buy and hold."

Taylor himself sometimes seem to regard them as being the same, but at other times has explicitly stated that they are not the same thing.

This revives an old discussion circa 2008/2009 when Taylor suggested that "staying the course" might include a "Plan B," which itself might include selling all stocks if they dropped below a certain point.

'Just trying to provide a bit of background for those who seem baffled by some of the backlash.
Wow. Thank you for posting that reference--it is revealing. Elaborating on this specific past example would provide a good example of the message some of us are trying to communicate, but it probably would lead down an unpleasant road, so I will not do that. I notice that guests often make up many times the registered active users of this forum. I hope they get the message and think critically about an important contention some are dismissing, even if the confirmation bias is strong among many of the respondents in this thread. If not, maybe the power of music will reach them.
I am still baffled by the backlash. It has nothing to do with confirmation bias and everything to do with respect. This very forum wouldn’t exist except for the efforts of a few amazing individuals including Taylor. To dig up quotes from 2008 and use it like dirt in a political campaign strikes me as unhelpful.
It's no attempt at disrespect, and the wonderful accomplishments of those involved with the forum have nothing to do with it. It simply reinforces the argument that there can be serious pitfalls when measuring strategies by their outcomes, even by experienced and knowledgeable investors. It's a message that doesn't seem to be getting through based on the numerous comments that mention pessimistic connotations that also are not relevant. Indeed, it can be just as problematic to judge the strategy based on the outcome if the outcome was bad. If someone pointed that out, I doubt very much the same individuals would disregard them due to a misperceived optimism.
Confirmation bias is a very real problem indeed. If people like A, then anything that can be interpreted, even falsely, as supportive of A they strongly tend to view favorably. If they believe that something or someone is not supportive of A, then they strongly tend to disregard or discount it.

The point that several of us have been trying to reiterate throughout this thread is that basing an entire strategy on short-term results is inherently flawed. If someone came in here and said that they had successfully timed the market with individual securities and had 400% returns over the last two years, we would not use that as strong evidence that such a strategy was appropriate. Similarly, the S&P 500 being at record highs has nothing to with buy-and-hold being a good or bad strategy. As I've said before, it would be akin to saying that because the orange in my hand is round, then the earth must be round. Even though the earth is indeed round, the orange being round has literally nothing to do with that.

It's a bad argument for a good strategy.
Perhaps we are arguing past each other. I agree with everything you are saying. I get it. Confirmation bias is becoming worse every day with social media and algorithms from Facebook to google steering people unconsciously to what they favor. I wasn’t looking at a comment that the S&P 500 hit a new high and staying the course as something to go so deep in the weeds about is all. I simply took it as a light hearted comment with which to be happy for the moment because tomorrow is a different day. I just feel there was a visceral flurry of comments that took aim at Taylor and a general negativism.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

Admiral
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Re: U.S. stocks continue to soar!

Post by Admiral » Thu Apr 25, 2019 8:12 am

AerialWombat wrote:
Wed Apr 24, 2019 4:24 pm
DukeMeredith wrote:
Wed Apr 24, 2019 4:05 pm
Honest question: does anyone really spend $10.00 every day at Starbucks?
Not Starbucks (coffee is disgusting!), but I do spend $10-$12 nearly every day on Red Bull and junk snacks at local convenience store.

There is zero justification for it.
If you're consuming Red Bull and junk snacks from the 7-Eleven everyday you can probably plan for a shorter retirement :twisted: !

DaftInvestor
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Re: U.S. stocks continue to soar!

Post by DaftInvestor » Thu Apr 25, 2019 8:40 am

DukeMeredith wrote:
Wed Apr 24, 2019 4:05 pm
J G Bankerton wrote:
Wed Apr 24, 2019 8:56 am
TheTimeLord wrote:
Wed Apr 24, 2019 8:49 am
J G Bankerton wrote:
Wed Apr 24, 2019 8:45 am
I just bought VTI with the market at historic highs. What me worry? :greedy
I bought a latte at Starbucks this morning with prices at an all-time high. And I tipped the Barista.
Starbucks is the anti Boglehead; spending $2,500 a year on coffee is excessive. I brew my own and buy VTI with the savings.
Honest question: does anyone really spend $10.00 every day at Starbucks?
It's ($3,650 yearly on Starbucks) is a mere drop in the bucket for many here.

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Misenplace
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Re: "S&P 500 Index closes at record high"

Post by Misenplace » Thu Apr 25, 2019 9:34 am

This topic has been reopened. Please keep the discussion on topic.

Moderator Misenplace

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Ricchan
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Re: U.S. stocks continue to soar!

Post by Ricchan » Thu Apr 25, 2019 10:55 am

DaftInvestor wrote:
Thu Apr 25, 2019 8:40 am
DukeMeredith wrote:
Wed Apr 24, 2019 4:05 pm
J G Bankerton wrote:
Wed Apr 24, 2019 8:56 am
TheTimeLord wrote:
Wed Apr 24, 2019 8:49 am
J G Bankerton wrote:
Wed Apr 24, 2019 8:45 am
I just bought VTI with the market at historic highs. What me worry? :greedy
I bought a latte at Starbucks this morning with prices at an all-time high. And I tipped the Barista.
Starbucks is the anti Boglehead; spending $2,500 a year on coffee is excessive. I brew my own and buy VTI with the savings.
Honest question: does anyone really spend $10.00 every day at Starbucks?
It's ($3,650 yearly on Starbucks) is a mere drop in the bucket for many here.
One drop can cause the bucket to overflow. 8-)

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Re: "S&P 500 Index closes at record high"

Post by LadyGeek » Thu Apr 25, 2019 3:12 pm

An off-topic post has been removed. As a reminder, see: General Etiquette
At all times we must conduct ourselves in a respectful manner to other posters.
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Re: U.S. stocks continue to soar!

Post by LadyGeek » Thu Apr 25, 2019 3:20 pm

I merged Taylor Larimore's thread into the on-going discussion.

(Let's try to keep 2 threads - this one for the stock market going up. U.S. stocks in free fall for the stock market going down.)
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Re: "S&P 500 Index closes at record high"

Post by willthrill81 » Thu Apr 25, 2019 3:24 pm

Ferdinand2014 wrote:
Thu Apr 25, 2019 12:54 am
I just feel there was a visceral flurry of comments that took aim at Taylor and a general negativism.
Maybe it's just a difference in perception, but I don't believe that most of the comments were directed toward Taylor specifically or mere pessimism. Many comments, including my own, were in relation to the perceived implication that the S&P 500 being at record highs was supportive of a specific investment strategy and our taking issue with that.

:beer
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Re: U.S. stocks continue to soar!

Post by DaftInvestor » Thu Apr 25, 2019 4:42 pm

I've got one friend who sold in October and another that sold in December since a big crash of 25% - 50% was imminent -- and here we are at new highs again across many of the indexes! Buy and Hold baby!

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Re: U.S. stocks continue to soar!

Post by dogagility » Thu Apr 25, 2019 4:47 pm

DaftInvestor wrote:
Thu Apr 25, 2019 4:42 pm
I've got one friend who sold in October and another that sold in December since a big crash of 25% - 50% was imminent -- and here we are at new highs again across many of the indexes! Buy and Hold baby!
To the moon, Baby! To the moon! :sharebeer
Taking "risk" since 1995.

SGM
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Re: U.S. stocks continue to soar!

Post by SGM » Fri Apr 26, 2019 2:10 am

I stay optimistic, but have no crystal ball. It is amusing to watch people jump in and out of the market because they are certain about which way it is going. I prefer to stick with the AA that is in my plan. We don't rebalance very often. We keep our investment expenses low and don't change based on what is mostly noise about short term market pgrognostication.

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Re: U.S. stocks continue to soar!

Post by grettman » Fri Apr 26, 2019 4:18 am

SGM wrote:
Fri Apr 26, 2019 2:10 am
I stay optimistic, but have no crystal ball. It is amusing to watch people jump in and out of the market because they are certain about which way it is going. I prefer to stick with the AA that is in my plan. We don't rebalance very often. We keep our investment expenses low and don't change based on what is mostly noise about short term market pgrognostication.
Same here. I have been over 90% equities for over 20 years..... I don't rebalance and I don't make knee jerk changes.

I view the noise as entertainment.

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Re: U.S. stocks continue to soar!

Post by Gufomel » Fri Apr 26, 2019 8:25 am

Shaping up to be another good day for stocks on positive economic data (3.2% annualized GDP growth in Q1 vs 2.3% expected).

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Re: U.S. stocks continue to soar!

Post by Gufomel » Fri Apr 26, 2019 8:26 am

DaftInvestor wrote:
Thu Apr 25, 2019 4:42 pm
I've got one friend who sold in October and another that sold in December since a big crash of 25% - 50% was imminent -- and here we are at new highs again across many of the indexes! Buy and Hold baby!
Yikes, I hope at least very early December?

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Re: U.S. stocks continue to soar!

Post by JTColton » Fri Apr 26, 2019 8:49 am

Gufomel wrote:
Fri Apr 26, 2019 8:25 am
Shaping up to be another good day for stocks on positive economic data (3.2% annualized GDP growth in Q1 vs 2.3% expected).
3.2% :sharebeer

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Re: U.S. stocks continue to soar!

Post by Gufomel » Fri Apr 26, 2019 8:58 am

JTColton wrote:
Fri Apr 26, 2019 8:49 am
Gufomel wrote:
Fri Apr 26, 2019 8:25 am
Shaping up to be another good day for stocks on positive economic data (3.2% annualized GDP growth in Q1 vs 2.3% expected).
3.2% :sharebeer
But stocks are down a little.

Exhibit 9275 of why I don’t attempt market timing.

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Re: U.S. stocks continue to soar!

Post by DaftInvestor » Fri Apr 26, 2019 12:17 pm

Gufomel wrote:
Fri Apr 26, 2019 8:26 am
DaftInvestor wrote:
Thu Apr 25, 2019 4:42 pm
I've got one friend who sold in October and another that sold in December since a big crash of 25% - 50% was imminent -- and here we are at new highs again across many of the indexes! Buy and Hold baby!
Yikes, I hope at least very early December?
Nope! A standard mistake market timers make is they assume (or listen to some "expert" in the financial news that states) a 25% - 50% drop is coming. They see a 10% drop and just assume "This is it! I am going to get out before it drops lower" not realizing that there is just no way to know whether a 10% drop will lead to a much larger drop or will simply reverse.
The pessimists also don't look at the statistics to understand that the latter is usually the case and the former is a much rarer event.
Many folks only make this mistake once or twice before learning their lesson (and hopefully don't lose too much money in the process) while others seem to spend their lifetime refining their market-timing strategies thinking that they have a better technique, indicator, or formula that will make them a big winner next time outsmarting the Boglehead way (there are many threads here on this actually!). I've stopped trying to correct the folks I know - I just sit back and watch my money grow while listening to their schemes that just never pan out.

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Re: U.S. stocks continue to soar!

Post by gmaynardkrebs » Fri Apr 26, 2019 12:56 pm

DaftInvestor wrote:
Fri Apr 26, 2019 12:17 pm
Gufomel wrote:
Fri Apr 26, 2019 8:26 am
DaftInvestor wrote:
Thu Apr 25, 2019 4:42 pm
I've got one friend who sold in October and another that sold in December since a big crash of 25% - 50% was imminent -- and here we are at new highs again across many of the indexes! Buy and Hold baby!
Yikes, I hope at least very early December?
Nope! A standard mistake market timers make is they assume (or listen to some "expert" in the financial news that states) a 25% - 50% drop is coming. They see a 10% drop and just assume "This is it! I am going to get out before it drops lower" not realizing that there is just no way to know whether a 10% drop will lead to a much larger drop or will simply reverse.
The pessimists also don't look at the statistics to understand that the latter is usually the case and the former is a much rarer event.
Many folks only make this mistake once or twice before learning their lesson (and hopefully don't lose too much money in the process) while others seem to spend their lifetime refining their market-timing strategies thinking that they have a better technique, indicator, or formula that will make them a big winner next time outsmarting the Boglehead way (there are many threads here on this actually!). I've stopped trying to correct the folks I know - I just sit back and watch my money grow while listening to their schemes that just never pan out.
I don't advocate market timing, but most of you reasoning is based on the US stock market performance. The evidence appears to be otherwise in other markets, including Europe, which has not been favorable to the "stay the course" mentality. There is no general rule.
...there is just no way to know whether a 10% drop will lead to a much larger drop or will simply reverse. The pessimists also don't look at the statistics to understand that the latter is usually the case and the former is a much rarer event.
If "the latter is usually the case," market timing would seem to make a lot of sense. Loading up after every dip would make you a lot more money than staying the course.

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Re: "S&P 500 Index closes at record high"

Post by abuss368 » Fri Apr 26, 2019 1:50 pm

Rowan Oak wrote:
Wed Apr 24, 2019 7:39 pm
Yes! And keep it simple with a 1-3 fund portfolio of low cost, broadly diversified index funds and then get on with your life.
Exactly as Mr. Bogle mentioned for many years: "Simplicity is the master key to financial success".

We presently have five index funds and may add one more for our "six pack"! I like many different portfolio's ranging form 1 - 6 funds. Anything more is simply overkill.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!"

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Re: U.S. stocks continue to soar!

Post by FBN2014 » Fri Apr 26, 2019 4:58 pm

My prediction is the S&P 500 at 3500 in November 2020.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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Re: U.S. stocks continue to soar!

Post by gmaynardkrebs » Fri Apr 26, 2019 5:12 pm

FBN2014 wrote:
Fri Apr 26, 2019 4:58 pm
My prediction is the S&P 500 at 3500 in November 2020.
Sell signal!

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Re: U.S. stocks continue to soar!

Post by marcopolo » Fri Apr 26, 2019 6:22 pm

gmaynardkrebs wrote:
Fri Apr 26, 2019 5:12 pm
FBN2014 wrote:
Fri Apr 26, 2019 4:58 pm
My prediction is the S&P 500 at 3500 in November 2020.
Sell signal!
Broken clock!

PS. I have no idea what the market will do going forward. I long ago gave up looking for such "signals"
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: U.S. stocks continue to soar!

Post by gmaynardkrebs » Fri Apr 26, 2019 6:49 pm

marcopolo wrote:
Fri Apr 26, 2019 6:22 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 5:12 pm
FBN2014 wrote:
Fri Apr 26, 2019 4:58 pm
My prediction is the S&P 500 at 3500 in November 2020.
Sell signal!
Broken clock!

PS. I have no idea what the market will do going forward. I long ago gave up looking for such "signals"
Irrational exuberance is a valid indicator.

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Re: U.S. stocks continue to soar!

Post by marcopolo » Fri Apr 26, 2019 7:19 pm

gmaynardkrebs wrote:
Fri Apr 26, 2019 6:49 pm
marcopolo wrote:
Fri Apr 26, 2019 6:22 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 5:12 pm
FBN2014 wrote:
Fri Apr 26, 2019 4:58 pm
My prediction is the S&P 500 at 3500 in November 2020.
Sell signal!
Broken clock!

PS. I have no idea what the market will do going forward. I long ago gave up looking for such "signals"
Irrational exuberance is a valid indicator.
So is the "wall of worry", if you are interested in such things.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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gmaynardkrebs
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Re: U.S. stocks continue to soar!

Post by gmaynardkrebs » Fri Apr 26, 2019 10:21 pm

marcopolo wrote:
Fri Apr 26, 2019 7:19 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 6:49 pm
marcopolo wrote:
Fri Apr 26, 2019 6:22 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 5:12 pm
FBN2014 wrote:
Fri Apr 26, 2019 4:58 pm
My prediction is the S&P 500 at 3500 in November 2020.
Sell signal!
Broken clock!

PS. I have no idea what the market will do going forward. I long ago gave up looking for such "signals"
Irrational exuberance is a valid indicator.
So is the "wall of worry", if you are interested in such things.
Where's the worry? What I see here is people saying not to worry, just be patient. That is not a wall or worry. The question is, how widespread is that view outside of BH? Probably a lot. Which is bad.

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Re: U.S. stocks continue to soar!

Post by marcopolo » Fri Apr 26, 2019 11:06 pm

gmaynardkrebs wrote:
Fri Apr 26, 2019 10:21 pm
marcopolo wrote:
Fri Apr 26, 2019 7:19 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 6:49 pm
marcopolo wrote:
Fri Apr 26, 2019 6:22 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 5:12 pm
Sell signal!
Broken clock!

PS. I have no idea what the market will do going forward. I long ago gave up looking for such "signals"
Irrational exuberance is a valid indicator.
So is the "wall of worry", if you are interested in such things.
Where's the worry? What I see here is people saying not to worry, just be patient. That is not a wall or worry. The question is, how widespread is that view outside of BH? Probably a lot. Which is bad.
Seriously? Have you missed all the hand wringing about valuations, the multiple threads about 3%, or 2% SWR because the future returns will be worse than any time in history? Which would be odd, since it seems you are one of the many contributors here who seem sure that stocks will either crash tomorrow, or have very poor returns over the next 10, 20, 30 years.

Many others say, that is possible, but you can't predict precisely when, so you are better of choosing an investment approach you are comfortable with and sticking with it.

I think you are mis-interpreting that as "don't worry", when the message is "you should always be worried, so plan conservatively, that way you don't have to worry about the day to day noise."

My perception is that exuberance is much less prevalent, at least on this forum.

But, I guess if you are a doom and gloomer, then anyone predicting anything other than the end of the world seems like they are irrationally exuberant.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: U.S. stocks continue to soar!

Post by Yohanson » Fri Apr 26, 2019 11:10 pm

FBN2014 wrote:
Fri Apr 26, 2019 4:58 pm
My prediction is the S&P 500 at 3500 in November 2020.
That's pretty aggressive but I wouldn't bet against you!

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Re: U.S. stocks continue to soar!

Post by gmaynardkrebs » Fri Apr 26, 2019 11:48 pm

marcopolo wrote:
Fri Apr 26, 2019 11:06 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 10:21 pm
marcopolo wrote:
Fri Apr 26, 2019 7:19 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 6:49 pm
marcopolo wrote:
Fri Apr 26, 2019 6:22 pm


Broken clock!

PS. I have no idea what the market will do going forward. I long ago gave up looking for such "signals"
Irrational exuberance is a valid indicator.
I
So is the "wall of worry", if you are interested in such things.
Where's the worry? What I see here is people saying not to worry, just be patient. That is not a wall or worry. The question is, how widespread is that view outside of BH? Probably a lot. Which is bad.
Seriously? Have you missed all the hand wringing about valuations, the multiple threads about 3%, or 2% SWR because the future returns will be worse than any time in history? Which would be odd, since it seems you are one of the many contributors here who seem sure that stocks will either crash tomorrow, or have very poor returns over the next 10, 20, 30 years.

Many others say, that is possible, but you can't predict precisely when, so you are better of choosing an investment approach you are comfortable with and sticking with it.

I think you are mis-interpreting that as "don't worry", when the message is "you should always be worried, so plan conservatively, that way you don't have to worry about the day to day noise."

My perception is that exuberance is much less prevalent, at least on this forum.

But, I guess if you are a doom and gloomer, then anyone predicting anything other than the end of the world seems like they are irrationally exuberant.
Fair enough. Many of the positive views expressed here are nuanced, and there have been quite a few outright skeptics, myself included. However, I see more examples of magical thinking, which strikes me as infantile. What I mostly see is a widespread confusion/misunderstanding/denial of the real risk of long term stock investing.
Last edited by gmaynardkrebs on Sat Apr 27, 2019 7:57 am, edited 1 time in total.

DaftInvestor
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Re: U.S. stocks continue to soar!

Post by DaftInvestor » Sat Apr 27, 2019 5:28 am

gmaynardkrebs wrote:
Fri Apr 26, 2019 12:56 pm
DaftInvestor wrote:
Fri Apr 26, 2019 12:17 pm
..there is just no way to know whether a 10% drop will lead to a much larger drop or will simply reverse. The pessimists also don't look at the statistics to understand that the latter is usually the case and the former is a much rarer event.
If "the latter is usually the case," market timing would seem to make a lot of sense. Loading up after every dip would make you a lot more money than staying the course.
How do you load up after the dip? You leave cash on the sidelines and watch the market climb waiting for a dip? You likely end up losing out on a 25% runup (with a certain amount of cash that is sitting out of the market)
so you can load up on a 10% dip - you still lose. Slow and steady investing still wins the race. Time in market beats market timing.

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Re: U.S. stocks continue to soar!

Post by gmaynardkrebs » Sat Apr 27, 2019 7:54 am

DaftInvestor wrote:
Sat Apr 27, 2019 5:28 am
gmaynardkrebs wrote:
Fri Apr 26, 2019 12:56 pm
DaftInvestor wrote:
Fri Apr 26, 2019 12:17 pm
..there is just no way to know whether a 10% drop will lead to a much larger drop or will simply reverse. The pessimists also don't look at the statistics to understand that the latter is usually the case and the former is a much rarer event.
If "the latter is usually the case," market timing would seem to make a lot of sense. Loading up after every dip would make you a lot more money than staying the course.
How do you load up after the dip? You leave cash on the sidelines and watch the market climb waiting for a dip? You likely end up losing out on a 25% runup (with a certain amount of cash that is sitting out of the market)
so you can load up on a 10% dip - you still lose. Slow and steady investing still wins the race. Time in market beats market timing.
When valuations are low, put a higher amount into equities and less into cash, and vice versa. You might miss out on some gains, but the odds of coming out ahead in the end should be higher. Periodic re-balancing, if done often enough, accomplishes this to some extent as well.

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Re: U.S. stocks continue to soar!

Post by dogagility » Sat Apr 27, 2019 8:15 am

gmaynardkrebs wrote:
Sat Apr 27, 2019 7:54 am
DaftInvestor wrote:
Sat Apr 27, 2019 5:28 am
gmaynardkrebs wrote:
Fri Apr 26, 2019 12:56 pm
DaftInvestor wrote:
Fri Apr 26, 2019 12:17 pm
..there is just no way to know whether a 10% drop will lead to a much larger drop or will simply reverse. The pessimists also don't look at the statistics to understand that the latter is usually the case and the former is a much rarer event.
If "the latter is usually the case," market timing would seem to make a lot of sense. Loading up after every dip would make you a lot more money than staying the course.
How do you load up after the dip? You leave cash on the sidelines and watch the market climb waiting for a dip? You likely end up losing out on a 25% runup (with a certain amount of cash that is sitting out of the market)
so you can load up on a 10% dip - you still lose. Slow and steady investing still wins the race. Time in market beats market timing.
When valuations are low, put a higher amount into equities and less into cash, and vice versa. You might miss out on some gains, but the odds of coming out ahead in the end should be higher. Periodic re-balancing, if done often enough, accomplishes this to some extent as well.
Market timing and keeping dry powder are investing fallacies.
Taking "risk" since 1995.

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gmaynardkrebs
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Re: U.S. stocks continue to soar!

Post by gmaynardkrebs » Sat Apr 27, 2019 8:24 am

dogagility wrote:
Sat Apr 27, 2019 8:15 am
Market timing and keeping dry powder are investing fallacies.
It may be ill-advised, but it's not a fallacy, which I define as a false belief. Rather, it's something most investors are not good at. Probably because non-professional investors tend to act too much emotion. Warren Buffet has been keeping a large amount of cash at BHath for quite some time now.

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Re: U.S. stocks continue to soar!

Post by willthrill81 » Sat Apr 27, 2019 9:31 am

dogagility wrote:
Sat Apr 27, 2019 8:15 am
Market timing and keeping dry powder are investing fallacies.
That's awfully strong language considering that momentum is recognized in the academic community as every bit as valid of a factor as anything else. Granted, capturing momentum may be challenging, as it can be with any other factor, but that hardly makes believing it to be possible a fallacy.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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dogagility
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Re: U.S. stocks continue to soar!

Post by dogagility » Sat Apr 27, 2019 4:55 pm

gmaynardkrebs wrote:
Sat Apr 27, 2019 8:24 am
dogagility wrote:
Sat Apr 27, 2019 8:15 am
Market timing and keeping dry powder are investing fallacies.
It may be ill-advised, but it's not a fallacy, which I define as a false belief. Rather, it's something most investors are not good at. Probably because non-professional investors tend to act too much emotion. Warren Buffet has been keeping a large amount of cash at BHath for quite some time now.
Maynard,

This is a forum of and for personal investors. We seek to maximize our investing dollars using methods accessible to the non-insider.

People on this forum do not have the resources to invest like Warren Buffet. People on this forum do not have the access to companies like Warren Buffet. People on this forum don't invest the same way as Warren Buffet because of the lack of resources and the lack of access.

Bringing him up as an example is not helpful to investors on this forum. Saying people on BH should employ a particular method because it works for Warren Buffet is not helpful.

I stand by my previous statement that market timing and keeping dry powder are investing fallacies for the BH community.

DA

PS. Stocks do (and will continue to) soar! :beer
Taking "risk" since 1995.

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gmaynardkrebs
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Re: U.S. stocks continue to soar!

Post by gmaynardkrebs » Sat Apr 27, 2019 5:38 pm

dogagility wrote:
Sat Apr 27, 2019 4:55 pm
gmaynardkrebs wrote:
Sat Apr 27, 2019 8:24 am
dogagility wrote:
Sat Apr 27, 2019 8:15 am
Market timing and keeping dry powder are investing fallacies.
It may be ill-advised, but it's not a fallacy, which I define as a false belief. Rather, it's something most investors are not good at. Probably because non-professional investors tend to act too much emotion. Warren Buffet has been keeping a large amount of cash at BHath for quite some time now.
Maynard,

This is a forum of and for personal investors. We seek to maximize our investing dollars using methods accessible to the non-insider.

People on this forum do not have the resources to invest like Warren Buffet. People on this forum do not have the access to companies like Warren Buffet. People on this forum don't invest the same way as Warren Buffet because of the lack of resources and the lack of access.

Bringing him up as an example is not helpful to investors on this forum. Saying people on BH should employ a particular method because it works for Warren Buffet is not helpful.

I stand by my previous statement that market timing and keeping dry powder are investing fallacies for the BH community.

DA

PS. Stocks do (and will continue to) soar! :beer
What I said is that that market timing and keeping cash is not an investing "fallacy." I didn't say "people on BH should employ a particular method because it works for Warren Buffet."

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Re: U.S. stocks continue to soar!

Post by Trader Joe » Sat Apr 27, 2019 5:41 pm

I have been busy, so I just looked. The most recent close is on Friday, April 26, 2019 and is as follows:

Market Summary > S&P 500 Index
INDEXSP: .INX
2,939.88 +13.71 (0.47%)

This is wonderful news! Happy investing.

mikeyzito22
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Re: U.S. stocks continue to soar!

Post by mikeyzito22 » Sat Apr 27, 2019 8:33 pm

Yohanson wrote:
Fri Apr 26, 2019 11:10 pm
FBN2014 wrote:
Fri Apr 26, 2019 4:58 pm
My prediction is the S&P 500 at 3500 in November 2020.
That's pretty aggressive but I wouldn't bet against you!
Wow. This was something I read for possible outlook:
Low High Av Mnth from Todays date increase
2020 Nov 3281 3699 3490 2.4% 21.7%

So, almost spot on with the prediction.

mikeyzito22
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Re: U.S. stocks continue to soar!

Post by mikeyzito22 » Sat Apr 27, 2019 8:34 pm

mikeyzito22 wrote:
Sat Apr 27, 2019 8:33 pm
Yohanson wrote:
Fri Apr 26, 2019 11:10 pm
FBN2014 wrote:
Fri Apr 26, 2019 4:58 pm
My prediction is the S&P 500 at 3500 in November 2020.
That's pretty aggressive but I wouldn't bet against you!
Wow. This was something I read for possible outlook:

2020 Nov Low 3281 average 3490 high 3621

So, almost spot on with the prediction. However, we know how predictions turn out.
Last edited by mikeyzito22 on Sat Apr 27, 2019 8:39 pm, edited 1 time in total.

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HomerJ
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Re: U.S. stocks continue to soar!

Post by HomerJ » Mon Apr 29, 2019 12:14 pm

gmaynardkrebs wrote:
Fri Apr 26, 2019 12:56 pm
...there is just no way to know whether a 10% drop will lead to a much larger drop or will simply reverse. The pessimists also don't look at the statistics to understand that the latter is usually the case and the former is a much rarer event.
If "the latter is usually the case," market timing would seem to make a lot of sense. Loading up after every dip would make you a lot more money than staying the course.
You can't load up after every dip unless you sell before the dip.

His point is that AFTER a 10% drop, people sell thinking to load up when it drops ANOTHER 20-40%. But when it doesn't (most of the time), their market timing attempt fails.
The J stands for Jay

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HomerJ
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Re: U.S. stocks continue to soar!

Post by HomerJ » Mon Apr 29, 2019 12:18 pm

marcopolo wrote:
Fri Apr 26, 2019 11:06 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 10:21 pm
marcopolo wrote:
Fri Apr 26, 2019 7:19 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 6:49 pm
marcopolo wrote:
Fri Apr 26, 2019 6:22 pm


Broken clock!

PS. I have no idea what the market will do going forward. I long ago gave up looking for such "signals"
Irrational exuberance is a valid indicator.
So is the "wall of worry", if you are interested in such things.
Where's the worry? What I see here is people saying not to worry, just be patient. That is not a wall or worry. The question is, how widespread is that view outside of BH? Probably a lot. Which is bad.
Seriously? Have you missed all the hand wringing about valuations, the multiple threads about 3%, or 2% SWR because the future returns will be worse than any time in history? Which would be odd, since it seems you are one of the many contributors here who seem sure that stocks will either crash tomorrow, or have very poor returns over the next 10, 20, 30 years.

Many others say, that is possible, but you can't predict precisely when, so you are better of choosing an investment approach you are comfortable with and sticking with it.

I think you are mis-interpreting that as "don't worry", when the message is "you should always be worried, so plan conservatively, that way you don't have to worry about the day to day noise."

My perception is that exuberance is much less prevalent, at least on this forum.

But, I guess if you are a doom and gloomer, then anyone predicting anything other than the end of the world seems like they are irrationally exuberant.
This. I see very few posts stating "The market is likely to gain 10%-15% a year for the next 10 years!"

I see a lot of posts stating "The market is likely to only see 4% a year in the next 10 years."

And then there are those of us who state "We have no idea what will happen, but we've always planned around 4%, so either way, we're good."
The J stands for Jay

H-Town
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Re: U.S. stocks continue to soar!

Post by H-Town » Mon Apr 29, 2019 12:49 pm

dogagility wrote:
Sat Apr 27, 2019 4:55 pm
PS. Stocks do (and will continue to) soar! :beer
Then please kindly explain why we have the Stocks in free fall thread? :mrgreen:

Fact 1: Investing in stocks is risky. You may lose your principal.
Fact 2: Murphy's law: what can happen, will happen. A market crash of 50% or more can happen, and it will happen.

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Re: U.S. stocks continue to soar!

Post by gmaynardkrebs » Mon Apr 29, 2019 12:50 pm

HomerJ wrote:
Mon Apr 29, 2019 12:18 pm
marcopolo wrote:
Fri Apr 26, 2019 11:06 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 10:21 pm
marcopolo wrote:
Fri Apr 26, 2019 7:19 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 6:49 pm

Irrational exuberance is a valid indicator.
So is the "wall of worry", if you are interested in such things.
Where's the worry? What I see here is people saying not to worry, just be patient. That is not a wall or worry. The question is, how widespread is that view outside of BH? Probably a lot. Which is bad.
Seriously? Have you missed all the hand wringing about valuations, the multiple threads about 3%, or 2% SWR because the future returns will be worse than any time in history? Which would be odd, since it seems you are one of the many contributors here who seem sure that stocks will either crash tomorrow, or have very poor returns over the next 10, 20, 30 years.

Many others say, that is possible, but you can't predict precisely when, so you are better of choosing an investment approach you are comfortable with and sticking with it.

I think you are mis-interpreting that as "don't worry", when the message is "you should always be worried, so plan conservatively, that way you don't have to worry about the day to day noise."

My perception is that exuberance is much less prevalent, at least on this forum.

But, I guess if you are a doom and gloomer, then anyone predicting anything other than the end of the world seems like they are irrationally exuberant.
This. I see very few posts stating "The market is likely to gain 10%-15% a year for the next 10 years!"

I see a lot of posts stating "The market is likely to only see 4% a year in the next 10 years."

And then there are those of us who state "We have no idea what will happen, but we've always planned around 4%, so either way, we're good."
Any of those are fine with me, because they are at least possible. What's not fine is the single most widely held belief about future equity returns on this forum: "If you have a long enough investing horizon, you don't have much to worry about with stocks in the long run." Not because I don't want to believe it, but because it is not true. I'd be very receptive to comments from those who accept that as the starting point, and how they approach their equity allocation with that fundamental fact in mind. That may even be you, Homer -- I'm never quite sure in your case. :confused

PS: I agree that young, healthy people with good career prospects (human capital) really don't have to worry. They are the exception, because if stocks do poorly, they can work longer and save more.

Admiral
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Re: U.S. stocks continue to soar!

Post by Admiral » Mon Apr 29, 2019 1:41 pm

gmaynardkrebs wrote:
Mon Apr 29, 2019 12:50 pm
HomerJ wrote:
Mon Apr 29, 2019 12:18 pm
marcopolo wrote:
Fri Apr 26, 2019 11:06 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 10:21 pm
marcopolo wrote:
Fri Apr 26, 2019 7:19 pm


So is the "wall of worry", if you are interested in such things.
Where's the worry? What I see here is people saying not to worry, just be patient. That is not a wall or worry. The question is, how widespread is that view outside of BH? Probably a lot. Which is bad.
Seriously? Have you missed all the hand wringing about valuations, the multiple threads about 3%, or 2% SWR because the future returns will be worse than any time in history? Which would be odd, since it seems you are one of the many contributors here who seem sure that stocks will either crash tomorrow, or have very poor returns over the next 10, 20, 30 years.

Many others say, that is possible, but you can't predict precisely when, so you are better of choosing an investment approach you are comfortable with and sticking with it.

I think you are mis-interpreting that as "don't worry", when the message is "you should always be worried, so plan conservatively, that way you don't have to worry about the day to day noise."

My perception is that exuberance is much less prevalent, at least on this forum.

But, I guess if you are a doom and gloomer, then anyone predicting anything other than the end of the world seems like they are irrationally exuberant.
This. I see very few posts stating "The market is likely to gain 10%-15% a year for the next 10 years!"

I see a lot of posts stating "The market is likely to only see 4% a year in the next 10 years."

And then there are those of us who state "We have no idea what will happen, but we've always planned around 4%, so either way, we're good."
Any of those are fine with me, because they are at least possible. What's not fine is the single most widely held belief about future equity returns on this forum: "If you have a long enough investing horizon, you don't have much to worry about with stocks in the long run." Not because I don't want to believe it, but because it is not true. I'd be very receptive to comments from those who accept that as the starting point, and how they approach their equity allocation with that fundamental fact in mind. That may even be you, Homer -- I'm never quite sure in your case. :confused

PS: I agree that young, healthy people with good career prospects (human capital) really don't have to worry. They are the exception, because if stocks do poorly, they can work longer and save more.
In the long run...we're all dead.

What is it you don't believe?

You note that:
"What's not fine is the single most widely held belief about future equity returns on this forum: "If you have a long enough investing horizon, you don't have much to worry about with stocks in the long run."
Define "long enough" and "much to worry about" ?

I don't see anyone making strict predictions about very long term market performance. Sure, we see "4% SWR" or (lately) "3% SWR" but if you don't believe that profits from businesses will at least beat inflation by some measurable amount, then why invest in the stock market at all? Because that's all the stock market is, a return on a piece of a business (or a valuation/expectation of future profit, if the company is not profitable).

The only metric we have is the average returns over the last 90 years, which shows a reasonable RoR. It will be less for long periods, and more for long periods, and eventually return to the mean. If you happen to retire into a long down market...well, that's bad luck.

If anything I see more pessimism (or conservativism) re: returns on this forum than the reverse. It's just that there's no good alternative to the market. Show me something that returns 7-9% on average where I don't have to lift a finger to do any work, and I'll sign up!

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Re: U.S. stocks continue to soar!

Post by NYCwriter » Mon Apr 29, 2019 1:45 pm

DaftInvestor wrote:
Thu Apr 25, 2019 8:40 am
DukeMeredith wrote:
Wed Apr 24, 2019 4:05 pm
J G Bankerton wrote:
Wed Apr 24, 2019 8:56 am
TheTimeLord wrote:
Wed Apr 24, 2019 8:49 am
J G Bankerton wrote:
Wed Apr 24, 2019 8:45 am
I just bought VTI with the market at historic highs. What me worry? :greedy
I bought a latte at Starbucks this morning with prices at an all-time high. And I tipped the Barista.
Starbucks is the anti Boglehead; spending $2,500 a year on coffee is excessive. I brew my own and buy VTI with the savings.
Honest question: does anyone really spend $10.00 every day at Starbucks?
It's ($3,650 yearly on Starbucks) is a mere drop in the bucket for many here.
Not me. Not wealthy, so I make my own coffee and the extra goes into my Roth :D

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Re: U.S. stocks continue to soar!

Post by J G Bankerton » Mon Apr 29, 2019 1:47 pm

HomerJ wrote:
Mon Apr 29, 2019 12:14 pm
You can't load up after every dip unless you sell before the dip.
For those in the accumulation stage buying the dips is a good way to dollar cost average. Of course if there are no dips that month one has to buy high. As long a the market keeps setting new highs it still makes the register ring.

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TheTimeLord
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Re: U.S. stocks continue to soar!

Post by TheTimeLord » Mon Apr 29, 2019 1:47 pm

The great thing about being an optimist is you can be happy when stocks go up because your portfolio is more valuable, or happy when stocks fall because you can buy them at a better price. So maybe attitude is more important than market direction?
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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HomerJ
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Re: U.S. stocks continue to soar!

Post by HomerJ » Mon Apr 29, 2019 2:03 pm

TheTimeLord wrote:
Mon Apr 29, 2019 1:47 pm
The great thing about being an optimist is you can be happy when stocks go up because your portfolio is more valuable, or happy when stocks fall because you can buy them at a better price. So maybe attitude is more important than market direction?
In pretty much every aspect of life, a good attitude is a huge benefit.

I'm 50/50 stocks/bonds. I'm never wrong.

If stocks go up, look at me being smart with a good chunk being invested and making money!
If stocks go down, look at me being smart having a good chunk in safer bonds, preserving my wealth.

I win no matter what.
The J stands for Jay

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gmaynardkrebs
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Re: U.S. stocks continue to soar!

Post by gmaynardkrebs » Mon Apr 29, 2019 2:38 pm

Admiral wrote:
Mon Apr 29, 2019 1:41 pm
Show me something that returns 7-9% on average where I don't have to lift a finger to do any work, and I'll sign up!
Pretty good description of a Ponzi scheme.

EddyB
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Re: U.S. stocks continue to soar!

Post by EddyB » Mon Apr 29, 2019 3:25 pm

gmaynardkrebs wrote:
Fri Apr 26, 2019 6:49 pm
marcopolo wrote:
Fri Apr 26, 2019 6:22 pm
gmaynardkrebs wrote:
Fri Apr 26, 2019 5:12 pm
FBN2014 wrote:
Fri Apr 26, 2019 4:58 pm
My prediction is the S&P 500 at 3500 in November 2020.
Sell signal!
Broken clock!

PS. I have no idea what the market will do going forward. I long ago gave up looking for such "signals"
Irrational exuberance is a valid indicator.
I'm not banking on it, but a no-consequence prediction of basically 18% gain in 18 months doesn't sound like much evidence of irrational exuberance.

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